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HeartSciences Inc. (NASDAQ:HSCS) announced Monday it has amended its existing Equity Distribution Agreement with Maxim Group LLC, increasing the amount of common stock it may offer and sell through "at the market" offerings to up to $25 million. The amendment, entered into August 3, updates the original agreement first established in September 2023. The move comes as InvestingPro data shows the company is quickly burning through cash, with a concerning current ratio of 0.59 indicating potential liquidity challenges.
Under the revised terms, HeartSciences will pay Maxim Group a commission rate of 4.0% of the gross sales price per share for proceeds up to $11,036,310, and 3.0% for any sales exceeding that amount. The company stated it will not issue shares that would cause it to exceed the eligibility and transaction requirements for use of Form S-3, including General Instruction I.B.6. With a current market capitalization of just $5.9 million and the stock down nearly 14% in the past week, this financing could significantly impact existing shareholders. (InvestingPro subscribers have access to 10+ additional financial health indicators for HSCS.)
As of July 31, the aggregate market value of HeartSciences’ outstanding common stock held by non-affiliates was $14,737,609, based on 2,276,253 shares and a closing price of $5.73 per share on July 10, 2025. The company noted that, under SEC rules, it may not sell shelf securities in a public primary offering with a value exceeding one-third of the aggregate market value of its voting and non-voting shares held by non-affiliates in any 12-month period, as long as that value remains below $75 million. HeartSciences reported that it has not sold any shares under this provision during the past 12 months.
Shares issued under the agreement will be registered under the company’s shelf registration statement on Form S-3 (Registration No. 333-274554), which became effective September 28, 2023. The prospectus supplement for the offering was filed with the SEC on Monday.
This information is based on a press release statement contained in a recent SEC filing.
In other recent news, HeartSciences Inc. has made several notable announcements. The company reported an amendment to its 2023 Equity Incentive Plan, which will increase the maximum number of shares issuable under the plan to 1,000,000, pending shareholder approval. Additionally, the board’s compensation committee has granted restricted stock unit awards to key executives, with vesting tied to regulatory milestones or changes in control. HeartSciences also amended its bylaws to introduce a jury trial waiver and set a 3% ownership threshold for shareholders wishing to initiate derivative proceedings. Furthermore, the company has filed a Certificate of Designations for Series D Convertible Preferred Stock, linked to a $15 million fundraising effort. In compliance matters, HeartSciences received an extension from Nasdaq to meet the minimum stockholders’ equity requirement, with a deadline set for September 15, 2025. These updates reflect ongoing strategic and regulatory efforts within the company.
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